Some SCI Pharmtech, Inc. (TPE:4119) Analysts Just Made A Major Cut To Next Year's Estimates

Market forces rained on the parade of SCI Pharmtech, Inc. (TPE:4119) shareholders today, when the analysts downgraded their forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the latest downgrade, the current consensus, from the three analysts covering SCI Pharmtech, is for revenues of NT$1.6b in 2021, which would reflect a sizeable 39% reduction in SCI Pharmtech's sales over the past 12 months. Statutory earnings per share are anticipated to plunge 64% to NT$3.27 in the same period. Before this latest update, the analysts had been forecasting revenues of NT$2.7b and earnings per share (EPS) of NT$7.99 in 2021. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for SCI Pharmtech

The consensus price target fell 22% to NT$85.67, with the weaker earnings outlook clearly leading analyst valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values SCI Pharmtech at NT$107 per share, while the most bearish prices it at NT$68.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 39%, a significant reduction from annual growth of 8.7% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 23% next year. It's pretty clear that SCI Pharmtech's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that SCI Pharmtech's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of SCI Pharmtech.

There might be good reason for analyst bearishness towards SCI Pharmtech, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other concerns we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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